How can we not stop to ask this question? I have to admit that I have been part of the bell-ringers tolling the moment at which high-end (meaning high-priced) smartphones really have met their saturation points and that the global consumer audience is really demanding other devices than the one-upping components, features, displays, and the still next greater dose of memory. The global consumer market is not just about developed market purchases that broach or exceed US $500 for a smartphone, particularly when options for similar (not the same) devices at half or less than half the price are available and service options are broad.
What we see this week is that yes, all of that is true, but what Apple's 30-minutes to initial stock depletion of the iPhone 6 Plus in the middle of the night in the US teaches us, is that the global market is still diverse and there is intense demand for high-end (and high-priced), leading-edge smart devices, while the broader global market is similarly snapping up the quality-at-a-discount, lower-priced, second-tier phones from white box manufacturers and new competitors like Xiaomi and Huawei. These phones and these rising OEMs are not to be discounted, they are directly taking on Samsung and Apple, and competing for market share – and certainly they are winning the lower-priced smartphone tier.
The "mobile economy"
There is no question that the "mobile economy," as discussed in the recent Smith MarketWatch Quarterly, holds a powerful spot in the global economy, effecting and being affected by consumer demand for mobile devices, particularly the smart devices that allow people to connect to the internet and gain access to the global communication network. Looking at the research this year, research that has time depth and breadth and forecasted that high-priced smart devices were no longer the front-runner devices, we have to reconcile what happened in the wee hours in Cupertino, CA today. The saturation of high-priced, high-end smartphones is certainly NOT a thing of the past, looking at the speed of the sell-out of the iPhone 6 Plus, especially. At this time, none are available until at least later in October.
Diversification is not just for OEMs – consumers still diverse
The question of what's happening to the smartphone market actually makes MORE sense to me in the wake of today's iPhone 6 and 6 Plus sales. It is not that we have a one or another type of mobile economy. Rather, the mobile economy, like more traditional economies, is one that runs the gamut, and includes from the high-end to the low-end of whatever it is you are measuring. That makes far more sense. If we have a true mobile economy, then when a commodity (like the iPhone 6 and 6 Plus) hits the nail on the head, then those consumers will respond. When consumers' demands are not met, when they are not caught off-guard or captivated by what they'd not yet thought of as a desired device or feature, then they balance the more reasoned risk-reward behavior and act in a more conservative manner when having to pay high-prices for goods and services.
That's a lot of economics for a Friday, to be sure. What is important and interesting is that what today showed us, from economist to tech guru to consumer, is that demand is healthy and vibrant. The interest and willingness to spend on consumer electronics (CE) hasn't gone away, but to awaken that demand and the response of (pre-)purchasing power means that OEMs must rise to the challenge of capturing people's imaginations, of giving them something truly new and fun and useful – of remembering that innovation is rewarded and more of the same is met with saturated response.
This doesn't mean Apple is the only one to succeed. Not at all. But this year, and to date, this is the greatest response we've seen to a CE product in a very short period of time. That is a message to the semiconductor and electronics community. That is the challenge we need to keep front and center – innovate and move the industry and people's imaginations and seamless IoT experiences forward, and the market will reward you.